Apple's Big Question Is Growth

After tonight's Apple (AAPL) earnings release, there was immediately a lot of chatter about margins.

That is a sideshow.

At 37.5%, Apple margins are about where they have always been historically. The high 40% numbers were an anomaly from a few quarters back. No one should expect them to go back there anytime soon.

The real question facing the company -- and it's been hanging around for a while -- is growth. Where's it going to come from?

When people complain about Apple's lack of "innovation," that's really a question about growth. How can Apple dream up new stuff -- even more stuff than they've already got -- to really move the needle when it comes to revenue?

iPhones did fine in this quarter ¿ as most expected. That product line will do even better in the holiday quarter, as most expect.

The real worry was the iPad number. As Benedict Evans noted, the iPad product is quickly becoming as cyclical as the iPhone. There will certainly be a huge holiday quarter for Apple with the iPad because of the Air and the retina Mini, but what happens with the other three quarters of the year between releases?

Macs are deteriorating. iPods are pretty much gone. So what's next?

Bears say that TV is too small a market and that a new Watch product is a novelty trinket and not a meaningful revenue stream.

We will see on both those counts.

The real wild card, though, is... what comes after that? That's still a great unknown, and at the end of the day, that is what will determine whether or not it goes up in the longer term.

At the time of publication, Jackson was long AAPL.